The company will sell computing power and storage,
applications software and its database as a cloud service
businesses can rent instead of buying outright, Ellison said
yesterday in an address at the OpenWorld conference. An addition
to the Exadata line of servers packs more memory for
computations inside, and the revamped 12c database is Oracle’s
first new version for its flagship in five years.

Ellison is depending on new products and a shift to cloud
services to boost sales at the world’s largest supplier of
database software. Oracle’s share-price has underperformed SAP
and Salesforce.com Inc., its rivals in providing cloud computing
for businesses.

“Oracle should be in this business,” said Rick Sherlund,
an analyst at Nomura Holdings Inc., who recommends buying the
shares. “Oracle has to reposition for the cloud.”

The 12c database will let customers move their computing
jobs to the Internet, Ellison said. “You can access all of
these services across the network,” he said at the conference
in the Moscone Center in San Francisco. “It makes sense for
Oracle to be in all three tiers of cloud services.”

More Memory

The new Exadata server, called the X3, packs computing
power, storage capacity and high-speed networking into a single
chassis to speed performance of Oracle’s database and can set
the company apart from competitors by saving customers the work
of integrating technology themselves, co-president Mark Hurd
said at a press conference at OpenWorld today.

“We do the work,” he said. “We do that as part of our
R&D, vs. the customer’s IT budget.”

The X3 will be able to house as much as 22 terabytes of
flash computer memory and four terabytes of DRAM in a single
server rack to greatly speed up business reports. That’s four
times as much flash storage per rack than a previous version of
Exadata, Ellison said.

“If you thought the old Exadatas were fast, you ain’t seen
nothing yet,” said Ellison, wearing a suit and black turtleneck
before eight giant screens bearing his slides.

Sales for the Redwood City, California-based company
declined 2.3 percent in the fiscal first quarter ended August,
dragged down by a drop in the hardware business acquired from
Sun Microsystems in 2010. The revenue number missed analysts’
estimates as computer hardware sales declined for a sixth
straight period.

Cloud Computing

New software license sales, a measure of freshly signed
business -- tapered to 5 percent growth in the quarter, from
more than 16 percent a year ago.

Ellison said Oracle is “ideally positioned” to deliver
many components of hardware and software -- including its
database, application-connecting middleware and computer systems
-- as a cloud computing service delivered entirely through the
Internet, or with some equipment sitting in customers’ data
centers.

He has said the 12c database will let Oracle serve multiple
companies’ data-processing needs from the same information
storehouse and will arrive by early next year. The company’s
Exadata and Exalogic systems, plus its database, Java
development tools and social media-analysis software, can be
delivered to businesses as a service Oracle manages over the
Internet, Hurd said in an interview last week.

Growing Data

Hurd, along with other Oracle executives including Ellison,
will be speaking this week at the OpenWorld conference, which
opened yesterday and runs through Oct. 4.

International Business Machines Corp., Microsoft Corp. and
VMware Inc. are also vying to supply more of the platform
software that can help companies move to cloud computing. SAP’s
High Performance Analytical Appliance uses hardware from IBM,
Hewlett-Packard Co. and others to store data in computer memory
for faster analysis. SAP is the top business applications maker.

Before the first-quarter sales decline, Oracle’s revenue
growth had fallen to 1.3 percent in the previous quarter,
compared with 12 percent a year earlier, according to data
compiled by Bloomberg.

Shares of Oracle rose less than one percent to $31.67 at
the close in New York. Oracle is up 23 percent this year,
compared with gains of 33 percent for SAP and a 49 percent climb
for shares of Salesforce.com.

SAP Machines

SAP and Oracle are battling to sell products that can load
more of a program’s data in memory to let businesses gain an
edge by drawing insights from growing volumes of data, said Bill
Hostmann, an analyst at consultancy Gartner Inc.

“People’s ability to make decisions is still based on
pretty small sets of data,” said Hostmann, who has advised
Oracle on its new products. “That’s what’s really driving the
market.”

SAP has positioned machines running its HANA in-memory
computing software as a potential replacement for Oracle
databases. The machines are “a real-time platform” for
analyzing data and offer a different proposition to Oracle’s,
which let companies “do the same things they’ve been doing for
years, only faster,” SAP spokesman Jim Dever said in an e-mail
on Sept. 28.

“SAP has an in-memory machine that’s a little smaller than
what we offer,” Ellison said.